USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 1 of 39
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-11128
____________________
CAROLYN NOLEN,
on behalf of herself and all others similarly situated,
WINDY KELLEY,
on behalf of herself and all others similarly situated,
CARA KELLEY,
on behalf of herself and all others similarly situated,
PAULA LITTON,
on behalf of herself and all others similarly situated,
Plaintiffs-Appellants,
versus
FAIRSHARE VACATION OWNERS ASSOCIATION,
Defendant-Appellee.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 2 of 39
2 Opinion of the Court 22-11128
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 6:20-cv-00330-PGB-EJK
____________________
Before LUCK, LAGOA, and TJOFLAT, Circuit Judges.
LAGOA, Circuit Judge:
This appeal is about the alleged mismanagement of a trust
associated with the timeshare program run by Wyndham Vacation
Resorts, Inc. (“WVR”). Carolyn Nolen, Windy Kelley, Cara Kelley,
and Paula Litton (collectively, “Appellants”) are members of that
timeshare program and beneficiaries of the associated trust—the
Fairshare Vacation Plan Use Management Trust (the “Trust”)—
who claim that Fairshare Vacation Owners Association
(“Fairshare”) violated its fiduciary duties and the Arkansas Trust
Code in various ways as the Trustee of the Trust.
On March 18, 2021, the district court dismissed counts 2 to
4 of the first amended complaint for failing to adequately allege a
violation of Arkansas Code Ann. § 28-73-802 and count 5 for failing
to adequately allege a violation of Arkansas Code Ann. § 28-73-
1003. As part of that dismissal order, the district court left counts 1
and 6 intact and allowed Appellants to “file a second amended com-
plaint consistent with the directives of [the] [o]rder.”
Appellants subsequently filed their second amended com-
plaint on April 1, 2021. The district court, however, viewed the
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 3 of 39
22-11128 Opinion of the Court 3
second amended complaint as introducing entirely new theories of
liability and thereby exceeding the limited leave to amend that had
been granted for the purpose of correcting the problems identified
with counts 2 to 5 of the first amended complaint. After raising this
concern during a Federal Rule of Civil Procedure 16 conference
and giving Appellants a chance to respond, the district court struck
the second amended complaint in its entirety for exceeding the
scope of the leave to amend. In doing so, the District Court rein-
stated the first amended complaint as the operative pleading, with
only counts 1 and 6 remaining. Ultimately, the district court
granted summary judgment in favor of Appellee on both of those
remaining claims.
On appeal, Appellants contend that the district court erred
at each step: first by dismissing counts 2 to 5 of the first amended
complaint; then by striking the second amended complaint; and,
most recently, by granting summary judgment on counts 1 and 6
of the reinstated first amended complaint. Following careful re-
view, and with the benefit of oral argument, we affirm all of the
challenged rulings.
I. BACKGROUND
WVR, formerly known as Fairfield Resorts, Inc., develops
“resort communities” and sells interests in those communities as
part of a timeshare program. Consumers who purchase a
timeshare interest from WVR become members of the timeshare
program and beneficiaries of the Trust, an Arkansas trust estab-
lished by WVR. Broadly speaking, the main purpose of the Trust
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 4 of 39
4 Opinion of the Court 22-11128
is to enable members of the timeshare program to “use and ex-
change [their] Use Rights” in WVR resorts. Members do this by
assigning their use rights in their home resort to the Trust, to be
enjoyed by other members, which in exchange allows them to
book stays at other resorts.
The Trust is governed by Arkansas law and the Second
Amended Restated Fairshare Vacation Plan Use Management
Trust Agreement (the “Trust Agreement”). The Trust Agreement
establishes Fairshare as the Trustee and imposes on Fairshare the
duties to physically maintain the relevant properties, prepare ac-
counting, prepare federal tax returns, and maintain adequate insur-
ance. But the Trust Agreement also contemplates that Fairshare
will delegate the preparation of accounting and “any or all of its
[other] duties” to the Plan Manager. To that end, the Trust Agree-
ment establishes WVR as the “initial Plan Manager” and incorpo-
rates the “Management Agreement,” a separate agreement be-
tween Fairshare and WVR.
As a beneficiary of the Trust, each member is required to
pay an Owners’ Association Fee and a Program Fee. The Owners’
Association Fee is determined by each owners’ association and is
meant to cover the applicable “recreation, maintenance[,] and re-
serve fees and assessments and real estate taxes.” The Program
Fee, on the other hand, is determined by the Trustee (with input
from the Plan Manager) and is meant to cover “the cost of the op-
eration and administration of the Plan,” including “the operation
and administration of the Trust.” The Management Agreement
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 5 of 39
22-11128 Opinion of the Court 5
entitles WVR, as the Plan Manager, to “monthly compensation
equal to one-twelfth (1/12th) of five percent (5%) of the Program
Fees.” And despite also being considered a member, WVR is gen-
erally exempt from having to pay an Owners’ Association Fee and
a Program Fee.
On February 25, 2020, Appellants 1 filed their initial com-
plaint, naming WVR, Fairshare, and RCI, LLC, 2 as defendants. Ap-
pellants are consumers who purchased timeshares from WVR and
accordingly became beneficiaries of the Trust. Generally speaking,
the initial complaint accused WVR of running an unlawful securit-
ization and re-financing scheme; Fairshare of improperly retaining
excess Trust Funds and negligently operating the Trust; WVR and
Fairshare of being affiliated entities and engaging in self-dealing
through their interactions with one another; and all three defend-
ants of violating the Arkansas Trust Code and conspiring to im-
properly profit from the timeshare exchange program.
On May 26, 2020, the defendants moved to dismiss the initial
complaint—on the bases that it failed to state a claim and consti-
tuted a shotgun pleading—and moved to stay discovery pending
resolution of the motion to dismiss. Within a day, the district court
denied the stay request.
1 Carolyn Nolen, one of Appellants, is also known as Carolyn Miller Jones, and
some documents in the record refer to her as such.
2 According to the Initial Complaint, RCI is an entity that helped operate the
timeshare exchange program.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 6 of 39
6 Opinion of the Court 22-11128
While the motion to dismiss was being briefed, the parties
filed a joint case management report on June 10, 2020. That report
proposed, among other things, a deadline of June 15, 2020, for any
motions to add a party or amend a pleading. Three weeks later,
the district court entered a case management and scheduling order
in which it adopted that proposed (and already expired) deadline.
The case management and scheduling order also adopted Decem-
ber 31, 2020, as the class certification discovery deadline; February
12, 2021, as the class certification motion deadline; and June 1,
2021, as the merits discovery deadline. The order also advised the
parties that “the pendency of a dispositive motion, such as a motion
to dismiss or for summary judgment, does not stay the deadline for
completion of discovery”; that motions for an extension are disfa-
vored; and the district court may impose sanctions, including “the
striking of pleadings,” on any party who fails to comply with the
order.
On September 10, 2020, the district court granted the mo-
tion to dismiss because the initial complaint constituted a shotgun
pleading. The district court noted that the initial complaint failed
to identify the facts relevant to each claim and failed to separate
into different counts the various claims asserted against each de-
fendant. In doing so, the district court gave Appellants until Sep-
tember 24, 2020, to “file an Amended Complaint consistent with
the directives of [the] Order,” and later extended that deadline to
October 8, 2020.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 7 of 39
22-11128 Opinion of the Court 7
Then, on October 8, 2020, Appellants filed the first amended
complaint. Unlike the initial complaint, the first amended com-
plaint brought claims against only Fairshare, not WVR or RCI.
Those claims consisted of the following: declaratory judgment
(count 1); violation of Arkansas Code Ann. § 28-73-802 by entering
into the Management Agreement with WVR (count 2); violation
of section 28-73-802 by self-dealing through financing agreements
(count 3); violation of section 28-73-802 by self-dealing through se-
curitization (count 4); violation of Arkansas Code Ann. § 28-73-
1003 by profiting from the use of Trust property (count 5); and
breach of fiduciary duty (count 6).
On November 5, 2020, Fairshare moved to dismiss the first
amended complaint, once again arguing that Appellants had failed
to state any claim. In light of that dispositive motion, Appellants
moved unopposed for an extension of the February 12, 2021, class
certification deadline to avoid having to brief “theories that may
not survive” the resolution of the motion to dismiss. The district
court promptly denied that request. Appellants thus filed their mo-
tion for class certification on February 12, 2021, while Fairshare’s
motion to dismiss remained pending.
About a month later, the district court granted in part and
denied in part the motion to dismiss the first amended complaint.
The district court dismissed without prejudice counts 2 to 5 and
allowed counts 1 and 6 to proceed. As to counts 2 to 4 (the sec-
tion 28-73-802 claims), the district court held that the first amended
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 8 of 39
8 Opinion of the Court 22-11128
complaint failed to adequately allege that subsection (b) of the stat-
ute was met. As to count 5 (the section 28-73-1003 claim), the dis-
trict court held that the complaint’s allegations that Fairshare
charged excessive fees and improperly retained Trust funds were
conclusory and inadequate. The district court ended its order with
the following instruction:
On or before April 1, 2021, [Appellants] may file a
second amended complaint consistent with the direc-
tives of this Order, if they believe they can do so in
accordance with Rule 11. Failure to timely file a sec-
ond amended complaint will result in dismissal of this
entire action with prejudice.
(Emphasis in original). The district court contemporaneously de-
nied as moot the motion for class certification by separate order.
On April 1, 2021, Appellants filed their second amended
complaint, once again naming Fairshare as the sole defendant. The
second amended complaint included the following claims: (1) de-
claratory judgment; (2) violation of Arkansas Code Ann. § 28-73-
801 by failing to hold a vote on the fund balance; (3) violation of
Arkansas Code Ann. § 28-73-804 by failing to hold a vote on the
fund balance; (4) violation of section 28-73-801 by paying market-
ing expenses to WVR; (5) section 28-73-802 by paying marketing
expenses to WVR; (6) violation of Arkansas Code Ann. § 28-73-805
by paying marketing expenses to WVR; (7) violation of section 28-
73-804 by failing to investigate the reasonableness of WVR’s man-
agement fees; (8) violation of section 28-73-805 by failing to inves-
tigate the reasonableness of WVR’s management fees; and (9)
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 9 of 39
22-11128 Opinion of the Court 9
breach of fiduciary duty. All of these claims were based on, among
other things, new allegations that Fairshare: (1) failed to perform
due diligence related to the selection of WVR as Plan Manager; (2)
used Trust funds to reimburse WVR for its marketing expenses in
violation of the Management Agreement 3; and (3) failed to hold a
vote on what to do with the excess Trust funds in violation of its
own bylaws. 4
Along with the second amended complaint, Appellants filed
a motion for a Rule 16 conference and an extension of the case
management deadlines. 5 The next day, Fairshare indicated that it
agreed that a Rule 16 conference would be beneficial. The district
court promptly responded by scheduling a telephonic hearing for
April 8, 2021.
At that hearing, the district court brought up for discussion
the propriety of the second amended complaint. The court began
by clarifying the scope of the leave to amend:
3 Section 6.2(b)(iii) of the Management Agreement provides that the Plan Man-
ager “shall be responsible for and pay from [its] own funds all . . . marketing
costs regarding sales of Memberships.” This contrasts with section 6.2(a),
which provides that the Trust shall reimburse the Plan Manager for certain
other costs.
4 Section 2.2 of Fairshare’s Second Amended and Restated Bylaws states that,
for any year which results in a balance surplus, the Board of the Trust shall
cause the Members to vote on whether the surplus should be refunded to the
Members or applied to next year’s costs. Appellants contend that those bylaws
are incorporated into the Trust Agreement by reference.
5 Rule 16 governs pretrial conferences and scheduling.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 10 of 39
10 Opinion of the Court 22-11128
In the [Order Granting in Part and Denying in Part
the Motion to Dismiss the First Amended Com-
plaint], there is language at the end that states that by
April 1st, 2021, [Appellants have] leave to re-file their
complaint consistent with the Court’s directives, if
they can do so without violating Rule 11 and then
stating, of course, if there’s a failure to re-submit a
complaint then the case will be dismissed with preju-
dice, leaving the option to [Appellants] whether or
not to re-plead. And so the purpose of the motion to
dismiss, of course, was to narrow the issues before the
Court, if possible, and then the [Order Granting in
Part and Denying in Part the Motion to Dismiss the
First Amended Complaint] identified with particular-
ity what was wrong with the [first] amended com-
plaint.
The district court then contrasted the factual theories alleged in the
first amended complaint with those alleged in the second amended
complaint and expressed the following concern:
This change in theories . . . is driving the need for new
disclosure of class experts, presumably new deposi-
tions of corporate representatives, new disclosures or
updated disclosures of the merit expert reports to in-
corporate the new material and the extended dead-
lines for discovery and so forth, and the extended
deadline for the trial.
Let me tell you my concern with all this.
The case management and scheduling order makes it
pretty clear that the original complaint is obviously
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 11 of 39
22-11128 Opinion of the Court 11
the operative document and a plaintiff can modify it,
that is, amend it once without leave of court by June
15th of 2020. And that didn’t happen, of course. The
amended complaint occurred October 8th of 2020, as
a result of a motion to dismiss.
The second amended complaint was driven by the
more recent motion to dismiss [in] March of this year.
The deadline for raising new theories and new causes
of action had long ago expired. The Eleventh Circuit
caselaw is clear on this point.
The district court then cited some cases, including an unpublished
case from this Court, The Cincinnati Insurance Co. v. Cochran, No.
05-16867, 2006 WL 4495335, at *3 (11th Cir. Dec. 27, 2006), that
affirmed a district court’s decision to strike a counterclaim that ex-
ceeded the scope of the limited leave to amend. The district court
then continued as follows:
[M]y concern is that by not following the directives of
the [Order Granting in Part and Denying in Part the
Motion to Dismiss the First Amended Complaint],
which was limited to fixing the problems with the
[first] amended complaint, instead of doing that, a
whole new case is started 14 months after we began
this journey. And the real question becomes why that
occurred and what to do about it.
The proper procedural mechanism is to strike the
[second] amended complaint . . . and leave us with
whatever is left of the [first] amended complaint to
proceed as opposed to re-setting the clock.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 12 of 39
12 Opinion of the Court 22-11128
At that point, the district court gave Appellants a chance to
respond. Appellants explained that, in drafting the second
amended complaint, they “were attempting to address the deficien-
cies that the [c]ourt pointed out in its [Order Granting in Part and
Denying in Part the Motion to Dismiss the First Amended Com-
plaint].” Appellants also argued that they had simply added “facts,”
rather than any new theories. Fairshare, on the other hand, agreed
with the district court’s concern and noted that it had flagged the
issue of new, unpled theories in its response to the motion for class
certification. After both sides finished presenting argument, the
district court took the matter under advisement.
The next day, the district court entered an order striking the
second amended complaint. The district court stated that its order
granting leave to amend the first amended complaint was for the
sole purpose of “fixing the deficiencies” of counts 2 to 5 and con-
cluded that, by introducing new theories of liability, the second
amended complaint exceeded the scope of the leave to amend. For
that reason, and to ensure the orderly progression of the case, the
district court struck the second amended complaint in its entirety
and reinstated counts 1 and 6 of the first amended complaint. The
court also granted Appellants an extension of time through April
22, 2021, to file an amended motion for class certification, but
warned that they “may not advance new unpled theories of their
case” in any such motion.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 13 of 39
22-11128 Opinion of the Court 13
On April 22, 2021, as contemplated, Appellants filed their
amended motion for class certification. The district court ulti-
mately granted that motion about three months later.
In the meantime, on July 1, 2021, Fairshare moved for sum-
mary judgment on Appellants’ remaining claims, i.e., counts 1 and
6 of the first amended complaint. After full briefing, 6 the district
court granted the motion and entered summary judgment in
Fairshare’s favor on March 10, 2022. In so ruling, the district court
determined that no reasonable jury could find that Fairshare
breached its fiduciary duty by entering into the Management
Agreement with WVR; exempting WVR from paying the Program
Fees; failing to return the surplus trust balance; or charging exces-
sive program fees. As for the other theories of liability, Appellants
had waived the theories regarding the financing and securitization
of loans, and the district court expressly “refuse[d] to entertain ev-
idence related to” Appellants’ unpled theories of the case, i.e., the
second amended complaint’s theories of liability related to due dil-
igence, WVR’s marketing expenses, and the bylaws’ voting proce-
dure for excess funds.
6 The summary judgment record includes, among other things, the Trust
Agreement; the Management Agreement; a Joint Stipulation of Agreed Mate-
rial Facts; the testimony of Jodi Rogers, a Vice President of Club Accounting
for Wyndham Vacation Ownership Inc.; the testimony of Appellants Carolyn
Nolen, Paula Litton, Windy Kelley, and Cara Kelley; the Appellants’ signed
transaction documents; and the Kelleys’ Responses to Appellee’s Request for
Admissions.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 14 of 39
14 Opinion of the Court 22-11128
Appellants timely appealed.
II. STANDARDS OF REVIEW
“We review de novo a district court’s grant of a motion to
dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure
to state a claim, accepting the complaint’s factual allegations as true
and construing them in the light most favorable to the plaintiff.”
United States v. Henco Holding Corp., 985 F.3d 1290, 1296 (11th Cir.
2021). “To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
As relevant, “[w]e also review de novo a district court’s determina-
tion and application of state law in a diversity case.” Pendergast v.
Sprint Nextel Corp., 592 F.3d 1119, 1132 n.11 (11th Cir. 2010).
We review a district court’s exercise of inherent authority to
strike a pleading for abuse of discretion. State Exch. Bank v. Hartline,
693 F.2d 1350, 1352 (11th Cir. 1982).
We review de novo a district court’s grant of summary judg-
ment. Marbury v. Warden, 936 F.3d 1227, 1232 (11th Cir. 2019).
Summary judgment is proper when the evidence, viewed in a light
most favorable to the non-moving party, “presents no genuine is-
sue of material fact and compels judgment as a matter of law in
favor of the moving party.” Id. (quoting Caldwell v. Warden, 748
F.3d 1090, 1098 (11th Cir. 2014)).
III. ANALYSIS
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 15 of 39
22-11128 Opinion of the Court 15
Appellants challenge three of the district court’s rulings:
(1) the dismissal of counts 2 to 5 of the first amended complaint; (2)
the decision to strike the second amended complaint; and (3) the
summary judgment ruling in favor of Fairshare on counts 1 and 6
of the reinstated first amended complaint. We address those rul-
ings in chronological order. 7
A. The Order Granting Fairshare’s Motion to Dismiss
Counts 2 to 5 of the First Amended Complaint
The first ruling on appeal is the district court’s dismissal of
counts 2 to 5 of the first amended complaint. We begin with the
Arkansas Code Ann. § 28-73-802 claims (counts 2 to 4), and then
turn to the Arkansas Code Ann. § 28-73-1003 claim (count 5).
1. The Section 28-73-802 Claims (Counts 2 to 4)
Counts 2 to 4 of the first amended complaint are claims that
Fairshare violated section 28-73-802 (hereinafter, “section 802”)
through its dealings with WVR and management of the Trust. Sec-
tion 802 governs the duty of loyalty owed by trustees and reads, in
pertinent part, as follows:
(a) A trustee shall administer the trust solely in the in-
terests of the beneficiaries.
(b) Subject to the rights of persons dealing with or as-
sisting the trustee as provided in § 28-73-1012, a sale,
7 We note that on appeal no party has raised any issue regarding the district
court’s class certification order. We therefore do not address that order.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 16 of 39
16 Opinion of the Court 22-11128
encumbrance, or other transaction involving the in-
vestment or management of trust property entered
into by the trustee for the trustee’s own personal ac-
count or which is otherwise affected by a conflict be-
tween the trustee’s fiduciary and personal interests is
voidable by a beneficiary affected by the transaction
unless:
(1) the transaction was authorized by the terms of
the trust;
(2) the transaction was approved by a court;
(3) the beneficiary did not commence a judicial
proceeding within the time allowed by § 28-73-
1005;
(4) the beneficiary consented to the trustee’s con-
duct, ratified the transaction, or released the trus-
tee in compliance with § 28-73-1009; or
(5) the transaction involves a contract entered into
or claim acquired by the trustee before the person
became or contemplated becoming trustee.
(c) A sale, encumbrance, or other transaction involv-
ing the investment or management of trust property
is presumed to be affected by a conflict between per-
sonal and fiduciary interests if it is entered into by the
trustee with:
(1) the trustee’s spouse;
(2) the trustee’s descendants, siblings, parents, or
their spouses;
(3) an agent or attorney of the trustee; or
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 17 of 39
22-11128 Opinion of the Court 17
(4) a corporation or other person or enterprise in
which the trustee, or a person who owns a signifi-
cant interest in the trustee, has an interest that
might affect the trustee’s best judgment.
Ark. Code Ann. § 28-73-802(a)–(c). 8
The district court held that counts 2 to 4 fail to state a claim
under section 802 because they contain no allegations that the con-
ditions set out in subsections 802(b)(1) to (b)(5) are met. In the dis-
trict court’s view, subsection 802(b) is the subsection that provides
the applicable remedy in this case—i.e., the transactions at issue are
potentially “voidable” by an affected beneficiary—and so, to state
a claim, it is necessary to allege that subsection 802(b) is satisfied.
Thus, because counts 2 to 4 make no mention of subsection
802(b)’s conditions, the court dismissed those counts without prej-
udice. In so ruling, the district court rejected the premise that sub-
section 802(c) provides its own remedy.
8 Subsections 802(d) and (e) pertain to transactions that do not concern Trust
property. Ark. Code Ann. § 28-73-802(d)–(e). Subsection 802(f) pertains to
investments in securities. Id. § 28-73-802(f). Subsection 802(g) pertains to vot-
ing shares of stock or exercising similar powers of control. Id. § 28-73-802(g).
Subsection 802(h) lists a series of transactions that are not “preclude[d]” by
section 28-73-802 “if fair to the beneficiaries.” Id. § 28-73-802(h). Subsection
802(i) provides that a court may appoint a special fiduciary. Id. § 28-73-802(i).
And subsection 802(j) clarifies that subsections 802(b) through (e) “apply only
to irrevocable trusts created on or after September 1, 2005, and to revocable
trusts which become irrevocable on or after September 1, 2005.” Id. § 28-73-
802(j).
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 18 of 39
18 Opinion of the Court 22-11128
Appellants assert that the district court misunderstood sec-
tion 802 and counts 2 to 4 because “[v]oiding the conflicted trans-
action is an available remedy under both subsections” 802(b) and
(c) and thus counts 2 to 4 properly stated claims under the latter
subsection. Appellants claim that this understanding of subsection
802(c)—i.e., as providing a standalone remedy apart from subsec-
tion 802(b)—is supported by the Uniform Law Comment, which
discusses the different presumptions established by subsections
802(b) and (c). See Ark. Code Ann. § 28-73-802 cmt. Appellants also
challenge the significance of subsection 802(b) by arguing that,
even when a transaction has been authorized or ratified under sub-
section 802(b), it may still be unlawful under the common law. Ap-
pellants assert that a trustee cannot, for instance, eliminate the duty
of loyalty through contract. None of these arguments, however,
warrants reversal.
As a matter of statutory interpretation, Appellants are mis-
taken that subsection 802(c) provides a remedy separate from sub-
section 802(b). Under Arkansas law, which applies here, we “con-
strue the statute just as it reads, giving the words their ordinary and
usually accepted meaning in common language; if the language of
the statute is plain and unambiguous and conveys a clear and defi-
nite meaning, there is no occasion to resort to rules of statutory
interpretation.” State v. Ledwell, 526 S.W. 3d 1, 4 (Ark. 2017). And,
plainly read, subsections 802(b) and (c) operate as follows. Subsec-
tion 802(b) describes the kinds of transactions that are voidable, in-
cluding transactions that are “otherwise affected by a conflict,” and
then recognizes specific exceptions. Subsection 802(c), on the
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 19 of 39
22-11128 Opinion of the Court 19
other hand, identifies certain transactions that are “presumed to be
affected by a conflict.” See Ark. Code Ann. § 28-73-802(b)–(c). In
other words, subsection 802(b) establishes a remedy for certain cat-
egories of transactions, and subsection 802(c) helps clarify one of
those categories. See id. To the extent that Appellants purport to
rely on the Uniform Law Comment to support a different interpre-
tation of section 802, we emphasize that the actual text of section
802 is what controls. We also note, however, that nothing in the
Comment indicates that subsection 802(c) provides a standalone
remedy. See id. § 28-73-802 cmt. For these reasons, Appellants’ at-
tempt to frame counts 2 to 4 as claims for relief under subsection
802(c)—and not subsection 802(b)—is unavailing.
As for Appellants’ contention that a transaction can poten-
tially be authorized or ratified under subsection 802(b) but never-
theless unlawful, their point is not relevant here. The suggestion
is that the selection of WVR as Plan Manager was unlawful, despite
being contemplated by the Trust Agreement. 9 But the Trust
Agreement does not purport to eliminate Fairshare’s duty of loy-
alty to the Trust, and the first amended complaint does not allege
that it does. Thus, Appellants’ argument on this point is academic
and does not salvage counts 2 to 4.
The district court’s interpretation of section 802 accords
with the plain text of the statute. Accordingly, the district court did
9 The Trust Agreement states, in no uncertain terms, that “[t]he initial Plan
Manager shall be [WVR], its successors or assigns.”
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 20 of 39
20 Opinion of the Court 22-11128
not err in dismissing counts 2 to 4 without prejudice for failing to
allege that subsection 802(b) is met.
2. The Section 28-73-1003 Claim (Count 5)
Count 5 of the first amended complaint is brought under a
different section of the Arkansas Trust Code: section 28-73-1003
(hereinafter, “section 1003”). Section 1003 governs “[d]amages in
absence of breach” and provides:
(a) A trustee is accountable to an affected beneficiary
for any profit made by the trustee arising from the ad-
ministration of the trust, even absent a breach of
trust.
(b) Absent a breach of trust, a trustee is not liable to a
beneficiary for a loss or depreciation in the value of
trust property or for not having made a profit.
Ark. Code Ann. § 28-73-1003. Count 5, therefore, is a claim that
Fairshare made a profit from the administration of the Trust and is
accountable to the beneficiaries.
Count 5 alleges that Fairshare has continually “increase[d]
the amount of fees and revenues it collects from [Appellants] and
the class” despite “accumulating a positive trust fund balance
through [those] excess fees and revenues.” Relatedly, count 5 in-
corporates an allegation that “the Program Fee greatly exceeds the
amount necessary to cover the cost of the operation and admin-
istration of the Trust” and “results in substantial profits to
[Fairshare].” Count 5 also alleges that Fairshare “currently [holds]”
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 21 of 39
22-11128 Opinion of the Court 21
the surplus balance “for its own use” and has not shared it with or
credited it to Appellants and the class.
The district court held that the allegations mentioned above
are insufficient to state a claim under section 1003 and dismissed
count 5. As a preliminary matter, the district court noted that “a
‘positive trust fund balance’ by itself does not amount to profit for
[Fairshare].” More fundamentally, the court recognized count 5’s
core allegations of wrongdoing—i.e., that Fairshare charged exces-
sive fees and then held the surplus balance exclusively for its own
use—as conclusory and “fact-free.”
Appellants insist on appeal that count 5’s allegations are suf-
ficient to state a claim, but we find their arguments on this point
lack merit. Appellants highlight certain financial statements in the
summary judgment record, which confirm the existence of a sur-
plus Trust balance, and assert that “profit,” as used in section 1003,
refers to any excess of revenue over expenses. The cited financial
statements, however, are not proper to consider at this stage. See
Bickley v. Caremark RX, Inc., 461 F.3d 1325, 1329 n.7 (11th Cir. 2006)
(“A court is generally limited to reviewing what is within the four
corners of the complaint on a motion to dismiss.”). Moreover, as
the district court pointed out, the existence of a surplus trust bal-
ance is not, by itself, probative of any wrongdoing. As for Appel-
lants’ emphasis of the meaning of the term “profit,” that discussion
misses the mark entirely. Although section 1003 certainly uses
“profit” in the ordinary sense of the word, i.e., meaning the excess
of revenue over expenses, it specifically refers to “any profit made
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 22 of 39
22 Opinion of the Court 22-11128
by the trustee.” See Ark. Code § 28-73-1003(a) (emphasis added).
This surrounding language indicates that section 1003 comes into
play only when the trustee makes a profit—not simply when the
trust makes a profit. And, here, as the district court noted, count 5
offers at best conclusory allegations that Fairshare itself made a
profit.
Accordingly, the district court did not err in dismissing
count 5 of the first amended complaint.
B. The Order Striking the Second Amended Complaint
We now address the district court’s decision to strike the sec-
ond amended complaint. As discussed above, at a Rule 16 confer-
ence, after Appellants had filed the second amended complaint, the
district court expressed its concern that the new pleading exceeded
the scope of the leave to amend that had been granted. After this
hearing, the district court struck the second amended complaint in
its entirety and reinstated counts 1 and 6 of the first amended com-
plaint.
Appellants now argue that the district court erred in its treat-
ment of the second amended complaint, but we disagree. “[T]he
power to strike a pleading[] is inherent in a trial court’s authority
to enforce its orders and ensure prompt disposition of legal ac-
tions.” Hartline, 693 F.2d at 1352. In this case, the district court
reasonably interpreted the order in which it granted leave to
amend as permitting repleading for the exclusive purpose of cor-
recting counts 2 to 5 of the first amended complaint. See Cave v.
Singletary, 84 F.3d 1350, 1354 (11th Cir. 1996) (“[A] district court’s
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 23 of 39
22-11128 Opinion of the Court 23
interpretation of its own order is properly accorded deference on
appeal when its interpretation is reasonable.”).
Accepting that interpretation of the leave to amend, we do
not find any error in the district court’s determination that the sec-
ond amended complaint, as a whole, exceeds the scope of the leave
to amend. In addition to seven entirely new statutory claims, the
second amended complaint also introduces new factual theories
pertaining to Fairshare’s alleged failure to perform due diligence,
payment of WVR’s marketing expenses, and failure to hold a vote
as required under the bylaws. And, critically, those new theories
are incorporated into every count. Thus, not one count of the sec-
ond amended complaint is consistent with the district court’s un-
derstanding of the leave to amend. 10
10 In their reply brief, Appellants claim that they “were not given any oppor-
tunity to respond to the district court’s concerns regarding the [second
amended complaint].” (Emphasis in original). This is patently untrue. At the
hearing on April 8, 2021, the district court explained its concerns about the
second amended complaint and invited Appellants to respond, which they did.
See Doc. 79 at 9. And when the district court subsequently indicated that it
would be taking the matter under advisement, Appellants notably failed to
request an opportunity to supplement their oral argument with written brief-
ing. See id. at 17–18.
Relatedly, to the extent that Appellants claim that they were given insufficient
notice of the decision to strike, we disagree. The concern about the second
amended complaint’s introduction of new theories of liability was first raised
by Fairshare on March 15, 2021, in the response to the motion for class certifi-
cation, over three weeks before the April 8, 2021, hearing and the district
court’s ultimate ruling. See Doc. 66 at 23–25. Moreover, the original schedul-
ing order warned the parties that a noncompliant pleading might be stricken.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 24 of 39
24 Opinion of the Court 22-11128
For these reasons, we affirm the district court’s decision to
strike the second amended complaint.
C. The Order Granting Fairshare’s Motion for Summary
Judgment on Counts 1 and 6 of the First Amended Com-
plaint
We last turn to the district court’s grant of summary judg-
ment in favor of Fairshare on counts 1 and 6 of the reinstated first
amended complaint. As discussed, count 1 was a claim for declar-
atory judgment, and count 6 was a claim for breach of fiduciary
duty. Thus, both claims turned on the same question: whether
Fairshare, as Trustee, breached its fiduciary duty to Appellants.
The district court ultimately determined that no reasonable
jury could conclude that Fairshare committed such a breach. In
doing so, the district court considered the theories and evidence
that Fairshare breached its fiduciary duty by entering into the Man-
agement Agreement with WVR; exempting WVR from the Pro-
gram Fees; accumulating and retaining a surplus Trust fund bal-
ance; and charging members excessive Program Fees. However,
in accordance with its decision to strike the second amended com-
plaint, the district court refused to consider the theories and evi-
dence that Fairshare violated its fiduciary duty by failing to perform
See Doc. 40 at 16. On this record, we conclude that Appellants had adequate
notice of the decision to strike the second amended complaint.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 25 of 39
22-11128 Opinion of the Court 25
due diligence, reimbursing WVR for marketing expenses, and fail-
ing to hold a vote as required under the bylaws. 11
The crux of Appellants’ argument on appeal is that the sum-
mary judgment ruling “is inextricably infected with the errors of
the [Order Granting Fairshare’s Motion to Dismiss Counts 2–5 of
the First Amended Complaint]” and the order striking the second
amended complaint. In other words, Appellants maintain that the
district court erred by dismissing the other counts before summary
judgment and also contend that it erred in its summary judgment
analysis by refusing to consider evidence tied to the theories alleged
in the second amended complaint. But for the reasons discussed,
we find no error in the district court’s decisions to dismiss counts 2
to 5 of the first amended complaint, strike the second amended
complaint, and refuse to consider Appellants’ new theories of lia-
bility. Seeing as all of Appellants’ objections to the summary judg-
ment ruling simply rehash those antecedent issues, Appellants have
not presented a persuasive basis to reverse the summary judgment
ruling.
On review, we find the district court’s comprehensive sum-
mary judgment order to be well-reasoned and correct. We there-
fore affirm.
IV. CONCLUSION
11 Appellants abandoned the theories that Fairshare breached its fiduciary duty
by financing, re-financing, servicing, and securitizing loans.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 26 of 39
26 Opinion of the Court 22-11128
For these reasons, we affirm all three of the district court’s
orders on appeal.
AFFIRMED.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 27 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 1
TJOFLAT, Circuit Judge, Concurring in part and Dissenting in part:
I agree with my colleagues that the plaintiffs’ claims were
meritless. I concur in their affirmance of the District Court’s dis-
missal of counts two through five of the first amended complaint
and the District Court’s striking of the second amended complaint.
I respectfully dissent from my colleagues’ affirmance of the Dis-
trict Court’s grant of summary judgment on counts one and six of
the first amended complaint. I would have vacated the District
Court’s opinion and remanded the matter to the District Court
with instructions to dismiss those claims under Federal Rule of
Civil Procedure 19.
To fully understand the conflicts—and the Rule 19 and 23
issues—in this case, it is necessary to introduce the major players:
Wyndham Vacation Developer of the resort properties; sold
Resorts use rights in condominium properties to
(“Wyndham”) buyers; serves as Plan Manager of the
Wyndham exchange program through its
Management Agreement with the Asso-
ciation as Trustee.
Wyndham Parent company of Wyndham Vacation
Destinations Resorts; owns numerous other subsidiar-
ies that similarly develop resorts; in total
owns hundreds of resorts and tens of
thousands of condominium units.
The Wyndham ex- Program that allows Wyndham
change program timeshare owners to essentially trade
their use rights with other Wyndham
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 28 of 39
2 TJOFLAT, J., Concurring and Dissenting in part 22-11128
owners and travel to Wyndham Destina-
tions resorts other than their home re-
sort; the exchange program is operated
by Wyndham as the Plan Manager, pur-
suant to a Management Agreement with
the Association as Trustee.
The FairShare Trust To participate in the Wyndham exchange
(the “Trust”) program, buyers must assign their use
rights to the Trust, which is managed by
the Trustee—the Association.
The FairShare Each owner who assigns their use rights
Association to the Trust becomes a member of the
(the “Association” or Arkansas non-profit corporation the
the “Trustee”) FairShare Association. The Association
serves as Trustee of the Trust and is made
up of the thousands of Wyndham own-
ers who participate in the Wyndham ex-
change program through the Trust. The
complaints allege that the Association
Board is related to Wyndham because the
board members are Wyndham employ-
ees.
The Plan Manager Facilitates and operates the Wyndham ex-
change program under the Management
Agreement with the Trustee; Wyndham
serves as Plan Manager in addition to de-
veloping properties.
The Program Fund Each member of the Association pays a
yearly program fee into this fund, which
pays the Trustee for operating the ex-
change program; the Trustee estimates
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 29 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 3
how much money the program needs to
operate in the coming year; and excess
funds are either returned to the members
or credited to the amount they would
owe the next year. Wyndham, as Plan
Manager, is paid for the expenses it incurs
in operating the exchange program from
the Program Fund. It also receives 5% of
the total amount collected in a given year
as a fee for operating the exchange pro-
gram.
Plaintiffs’ argument is that the Association charged the
members excessive fees and that both the Association and Wynd-
ham—as Trustee and Plan Manager, respectively—profited from
the arrangement. The complaints—all three of them—frame the
relief sought as compensatory damages, punitive damages, and
other relief as the District Court saw fit to provide. But squeezed
down, the allegations in the complaints show that the plaintiffs re-
ally seek: a declaratory judgment that the Association violated its
fiduciary duties to the Association’s members, removal of the As-
sociation as Trustee, an accounting from the Association for excess
funds, and an injunction ordering that the Board of the Association
cancel the Management Agreement (which would remove Wynd-
ham as Plan Manager).
The named plaintiffs sought and received class certification
as a damages class action under Federal Rule of Civil Procedure
23(b)(3). The District Court certified the following class:
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 30 of 39
4 TJOFLAT, J., Concurring and Dissenting in part 22-11128
All persons and entities who are citizens of the United
States of America and who on or after March 14, 2008
[the date the most current Trust Agreement became
effective]: (1) purchased a timeshare with a Property
Interest (or the Use Rights therein) subject to
Fairshare Vacation Plan Use Management Trust or
(2) purchased (including upgrading or refinancing) a
Property Interest (or the Use Rights therein) previ-
ously subject to the Fairshare Vacation Plan Use Man-
agement Trust.[ 1]
But this case is not a damages class action. Even though the
plaintiffs framed the relief they sought as damages, the true relief
they sought—the relief that would actually solve their perceived
problems going forward—is injunctive in nature. Even the mone-
tary relief that is sought would be the result of injunctive relief.
That is, the plaintiffs need an order for an accounting to return the
allegedly excessive fees to the members.
In their motion for class certification, the plaintiffs argued
that they were not seeking wholesale changes to the Wyndham
timeshare system. But both in their complaint and before this
Court, that is exactly what they sought. The complaint sought a
court order removing the Association as the Trustee. And at oral
argument, plaintiffs’ counsel described the relief they sought as an
1 This class includes anyone who joined the Wyndham exchange program and
subjected their Use Rights to the Trust Agreement since March 2008. It there-
fore includes members who have since sold their Use Rights and are no longer
members of the Association.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 31 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 5
order requiring the Trustee to return the excessive fees. If this case
could have been certified as a class action, then it should have been
under either Rule 23(b)(1)(B) or (b)(2).
Rule 23(b)(1) and (2) are “mandatory class actions,” meaning
that class members are not typically afforded the option of “opting
out.” This is because the relief granted to the class will impact
them regardless of whether they are in the class. In a Rule
23(b)(1)(B) action:
prosecuting separate actions by or against individual
class members would create a risk of . . . adjudications
with respect to individual class members that, as a
practical matter, would be dispositive of the interests
of the other members not parties to the individual ad-
judications or would substantially impair or impede
their ability to protect their interests.
Fed. R. Civ. P. 23(b)(1)(B). In fact, “actions charging ‘a breach of
trust by an indenture trustee or other fiduciary similarly affecting
the members of a large class’ of beneficiaries, requiring an account-
ing or similar procedure to ‘restore the subject of the trust,’” is a
quintessential example of a Rule 23(b)(1)(B) action. Ortiz v. Fibre-
board Corp., 527 U.S. 815, 833–34, 119 S. Ct. 2295, 2308–09 (1999)
(quoting Fed. R. Civ. P. 23 advisory committee’s note to 1966
amendment).
Similarly, in a Rule 23(b)(2) action, “the party opposing the
class has acted or refused to act on grounds that apply generally to
the class, so that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole.” Fed. R. Civ. P.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 32 of 39
6 TJOFLAT, J., Concurring and Dissenting in part 22-11128
23(b)(2). Rule 23(b)(2) applies “only when a single injunction or
declaratory judgment would provide relief to each member of the
class.” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360, 131 S. Ct.
2541, 2557 (2011) (emphasis added).
Here, an order removing the Trustee would be “dispositive
of the interests of the other members” who do not want changes
to the program—but those members’ views are not represented.
Likewise, the inter-group conflict between those members who
would change the program versus those who benefit from the sta-
tus quo means that certification under Rule 23(b)(2) is inappropri-
ate: “The very nature of a (b)(2) class is that it is homogenous with-
out any conflicting interests between the members of the class.”
Holmes v. Cont’l Can Co., 706 F.2d 1144, 1155 (11th Cir. 1983) (quot-
ing Wetzel v. Liberty Mut. Ins. Co., 508 F.2d 239, 256 (3d Cir. 1975)).
Ultimately, the District Court should not have even reached
the question of which “type” of Rule 23(b) class action was appro-
priate. This case could not have been certified under any provision
of Rule 23(b) because the class does not meet the prerequisites of
Rule 23(a). This is especially important given that the more appro-
priate subsections of Rule 23(b) would have been the non-opt-out
classes, where “Rule 23(a)’s insistence that the class be adequately
represented by a litigant with claims typical of the class takes on
special resonance.” 2 William Rubenstein, Newberg and Rubenstein
on Class Actions § 4.27 (6th ed. 2023). The class here meets neither
criteria.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 33 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 7
Rule 23(a)(3) requires that “the claims . . . of the representa-
tive parties are typical of the claims . . . of the class.” Fed. R. Civ. P.
23(a)(3). In this case, though, the District Court certified a class of
everyone who has been a member of the Association at any point
since March 2008. The class is made up of current members and
former members. It is made up of those who favor—and arguably
benefit from—the current structure, as well as those who would
dismantle it. What a “typical” interest is depends on what type of
class member you are. Current class members who do not like the
way the system currently works have vastly different interests than
those current members who benefit from the current system. All
the current members’ interests vary wildly from former members
because the current members are on the hook for any judgment
against the Trustee—according to the Trust Agreement, any judg-
ment against the Trustee is paid out of the Program Fund, which
the current members fund each year. Given that there is no “typi-
cal” interest, the named plaintiffs also do not “fairly and adequately
protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). Nor could
a single class counsel “fairly and adequately represent the interests
of the class.” Fed. R. Civ. P. 23(g)(4). There is no “class” interest. 2
2 It is worth noting that, in moving for class certification, plaintiffs’ counsel
made representations under Rule 11 that: (1) the class met Rule 23(a)’s typical-
ity and adequacy prerequisites; (2) in addition to being certifiable under Rule
23(b)(3), the class could be certified under Rule 23(b)(2); and (3) counsel could
adequately represent the class in the action under Rule 23(g)(4). My analysis
suggests that, in making those representations, plaintiffs’ counsel violated
Rule 11.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 34 of 39
8 TJOFLAT, J., Concurring and Dissenting in part 22-11128
This class could not be certified under Rule 23 at all, which
means the cases—if they could be brought—would need to be
brought individually. But this leads to problems under Federal Rule
of Civil Procedure 19, which protects the rights of absent parties
by requiring a district court—if feasible—to join the absent parties
who have interests in the case so that they can defend their inter-
ests. In light of the interests Rule 19 protects, courts—including
this Court—are responsible for applying it sua sponte. As the Su-
preme Court explained, “[w]hen necessary . . . a court of appeals
should, on its own initiative, take steps to protect the absent party,
who of course had no opportunity to plead and prove his interest
below.” Provident Tradesmens Bank & Tr. Co. v. Patterson, 390 U.S.
102, 111, 88 S. Ct. 733, 738–39 (1968).
Rule 19(a)(1) provides, in pertinent part:
A person who is subject to service of process and
whose joinder will not deprive the court of subject-
matter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court
cannot accord complete relief among
existing parties; or
(B) that person claims an interest relat-
ing to the subject of the action and is so
situated that disposing of the action in
the person’s absence may [] as a practical
matter impair or impede the person’s
ability to protect the interest.
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 35 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 9
Fed. R. Civ. P. 19(a)(1). The Rule goes on to say that if a required
party has not been joined, “the court must order that the person be
made a party. A person who refuses to join as a plaintiff may be
made either a defendant or, in a proper case, an involuntary plain-
tiff.” Fed. R. Civ. P. 19(a)(2).
If the plaintiffs who wished to remove the Association as the
Trustee and Wyndham as the Plan Manager were to sue in an indi-
vidual action, the Association members who prefer the current
structure of the organization would undoubtedly be impaired or
impeded from protecting their interests if they were not joined as
a party. As such, the District Court should have, if feasible, joined
them as defendants to the action so that their views were repre-
sented and they had a chance to protect their interests.
If a district court cannot feasibly join those parties, it must
dismiss the case unless it can proceed in equity and good con-
science. Fed. R. Civ. P. 19(b). In determining whether it should
proceed, a district court considers:
(1) the extent to which a judgment rendered in the
person’s absence might prejudice that person or the
existing parties;
(2) the extent to which any prejudice could be less-
ened or avoided by:
(A) protective provisions in the judg-
ment;
(B) shaping the relief; or
(C) other measures;
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 36 of 39
10 TJOFLAT, J., Concurring and Dissenting in part 22-11128
(3) whether a judgment rendered in the person’s ab-
sence would be adequate; and
(4) whether the plaintiff would have an adequate rem-
edy if the action were dismissed for nonjoinder.
Id. Those factors “are ‘not intended to exclude other considera-
tions’; ‘pragmatic considerations’ play a key role in our determina-
tion.” Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1344
(11th Cir. 2011) (quoting Fed. R. Civ. P. 19 advisory committee’s
note to 1966 amendment).
In conducting Rule 19(b)’s equitable analysis, we have em-
phasized the breadth of the relief sought and the availability of an
alternative forum. See Tick v. Cohen, 787 F.2d 1490, 1495 (11th Cir.
1986) (per curiam). The broader the relief sought, the more diffi-
cult it is “to envision any conceivable way to fashion a meaningful
judgment which will not affect the absent beneficiaries[’] interests.”
Id. Relatedly, we emphasized that “any judgment favorable to the
[plaintiffs] which [was] rendered in the absence of the trust benefi-
ciaries will necessarily be inadequate.” Id. We also emphasized
that “the Florida courts [were] the superior forum for disposition
of [the] action[] because it involve[d] questions of Florida trust
law.” Id.
In this case, the Rule 19(b) factors weigh in favor of dismis-
sal. The first two factors that weigh powerfully in favor of dismis-
sal are the availability of alternative remedies and the impossibility
of narrowly shaping relief. The plaintiffs’ complaint demanded
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 37 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 11
broad relief that would effectively dismantle the Wyndham ex-
change program. Removal of the Trustee and removal of Wynd-
ham as Plan Manager would substantially alter the program’s op-
erations. There is no way to issue orders compelling the removal
and replacement of the FairShare Association as Trustee or Wynd-
ham as the Plan Manager without affecting the interests of all pro-
gram members. That is, there is no way to narrowly craft the relief
to give some class members what they want without impeding
other class members’ interests.
If a majority of the Association’s members desire these out-
comes, however, there is a simple—and obvious—solution. The
members can easily achieve their goals in a forum that is readily
available to all members: the annual Association meeting, where
each member has a vote. If plaintiffs are correct that all members
think the Plan Manager agreement harms them, 75% can all vote
to remove Wyndham at an Association meeting under the Trust
Agreement and the FairShare Association’s Bylaws. If plaintiffs are
also correct that all program members favor redistribution of the
excess program funds, then a majority of them can vote to do that
too. The Bylaws also provide that program members may vote by
proxy, meaning the members can send someone to the annual
meeting to vote for these measures on their behalf—they do not
need all of the members to show up individually to achieve their
desired outcome.
If the reason the members have not had a chance to vote on
the excess money is that the Board violated the Bylaws by refusing
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 38 of 39
12 TJOFLAT, J., Concurring and Dissenting in part 22-11128
to hold the vote, as plaintiffs allege, the members could sue the
Board members in a “direct action” for an in personam order enjoin-
ing them to follow the bylaws and hold the vote. See Hames v. Cra-
vens, 966 S.W.2d 244, 247 (Ark. 1998) (“[A] shareholder may sue in-
dividually in an action to enforce that shareholder’s voting rights,
to compel the payment of dividends, or to protect minority share-
holders.”). This, too, would more easily and more narrowly give
them the relief they seek.
Allowing the program members to obtain a vote on the fund
surplus—rather than issuing an order resolving the issue our-
selves—would allow the members to decide what to do with that
money without court involvement and without plaintiffs’ lawyers
taking home a portion of the members’ refund. As to other relief
the members might seek under trust law, the Arkansas courts are
better equipped to handle questions about a nonprofit corpora-
tion’s duties as trustee to beneficiaries who are also the corpora-
tion’s members under Arkansas law.
Dismissal under Rule 19 hardly even prejudices the interests
of absent program members who want a refund. Without a re-
fund, all program members will still get credit toward subsequent
years’ program fees in the same amount as they would receive
from a refund. The difference is that the members would have to
give plaintiffs’ counsel a slice of their refund if they obtained a
court-ordered refund. Moreover, given that the named plaintiffs
could not proceed with a class action, the absent members who
want a refund should not be parties. So, they would not be bound
USCA11 Case: 22-11128 Document: 46-1 Date Filed: 08/31/2023 Page: 39 of 39
22-11128 TJOFLAT, J., Concurring and Dissenting in part 13
by a judgment and could bring the same claim for the same relief,
leading to duplicative litigation. And, again, if most program
members want a refund, they can vote for one. On the whole, eq-
uity strongly favors dismissal.
The bottom line: the plaintiffs’ complaint should have been
dismissed under Rule 19 from the outset. If the named plaintiffs in
this case had prevailed, they would have changed a timeshare ex-
change program that its thousands of members had invested in.
But the members who were satisfied with the program were not
properly joined as defendants so that they could defend their inter-
ests in retaining what they signed up for.
Because joining those members was not feasible, and the
District Court could not proceed in equity and good conscience
without them, the District Court should have dismissed the case.
Respectfully, I therefore dissent from that portion of the Majority
Opinion.